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tv   Real Money With Ali Velshi  Al Jazeera  October 2, 2013 7:00pm-7:29pm EDT

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have, and maybe an approach to funding the government. and no discussion of a talk of any kind of negotiations that both sides still remain dug in on their positions. more on that in a bit. welcome to al jazeera, top stories right now, president obama is wrapping up a meeting with house and senate leaders. we just heard moments ago from the speaker of the house john boehner. the speaker said all sides had a nice and polite conversation, but there was no deal. the speaker again asking for a conference committee between house and senate leaders to work out a compromise. on wall street, stocks finished lower, the dow closed down 59 points. it had fallen nearly 150 points earlier in the day. the nasdaq and s&p were also
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down. michael jackson's concert promoter was found not negligent in the case of the stars death. at least eight people are dead after a bus crash on a tennessee highway. the crash happened about 20 miles northeast of knoxville. three vehicles were involved including a church bus. and those are the headlines at this hour. "real money with ali velshi" is next on al jazeera america. ♪ shut out by the shut down. parents who depend on federal funding are feeling the pain. who's on track to be the world's biggest gin producer.
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it's not saudi arabia. a case involving the "f" word but not one you're thinking of. i'm ali velshi. this is "real money." >> this is "real money" you're the most important part of the show so join our live conversation for the next half hour by using the hash tag aj real money on twitter. it's day two of the government shut down. congress has bigger fish to fry in the coming days. it needs to pass legislation before october 17th after which the treasury says it can't pay the government's bill. the legal debt limit is $$16.7 trillions. the treasury already hit that money in may but has been using extraordinary measures to keep paying the bill. october 17th is really, according to trerb try
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secretary, the end of the line. democrat want to raise the limit. republicans in the house propose suspending the debt limit for a year. that is a very interesting proposal. a lot of strings which taken together look like a laundry list. i will give it to you. here's what the republicans want. delay implementing obama care for one year. sign off on the excel pipeline to bring more oil in from canada. allow more offshore the oil drilling. allow more on travelly protected land. reform the federal employee retirement program. overhaul reform and reign in the consumer protection bureau was createed in the wake of the financial crisis. it gives money to states to help the poor and republicans want more scrutiny over who qualifies if for medicare.
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there's more but you get the point. these are not the building blocks for a deal especially as we get closer to hitting the debt ceiling and missing payments. i'm going to tell you about the devastateing effect that will have on the country's finances and more importantly on yours as well. today on twitter and facebook, i'm going to ask you how did you think the federal budget will effect your personal situation. people will once again hold back on money by fewer sales or by business. non-essential means exactly th that. go to alivelshi@real money. thousands of american parents are struggling to find a way to get through the day. that's because they rely on
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thriller child education program called head start to teach, care for and feed their children. stacy went to bridgeport, connecticut to show us how the government shut down is trickling down to one working class mother and her child. >> reporter: it's 8:45 in bridgeport, connecticut. 34-year-old mely zsa hall would be dropping off her son at school. >> i would be on my way to work. i can head work to by 9:00. >> reporter: they are at home because of the government shut down. they are one of a thousand families that rely on head start, an early childhood education program that gets most of its funding through the federal government. that funding was halted on tuesday. it's now 10:230 a.m. and normally this classroom would be bustling with children. but today it sits empty. he's missing a lot of education with his a, b, cs,
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coloring, shaping, right now he would be at social time readinging a book. >> reporter: she is missing a lot of work because she cannot afford other child care. >> she points to research to the importance of programs like head start and for preparing young children like ramon for kindergarten. >> already, we have a population of children who are not getting the advantages that they their middle and higher income kids are getting every day they are not in school is an opportunity oh lost. >> reporter: in addition to education, parents like melissa who take home $190 a week rely on the free breakfast and lunch program they supply. today she's paying for those meals. >> it cuts me $20 or $30 a week. we are the lifeline for
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people living in poverty in this community. we provide the education for their children. we provide the meals for their children. we provide homeless services, we help people who are in danger of losing their homes, stay in their homes. we provided the energy assistance so they can't afford their heating kpweul with their electricity. they are able to keep the heat on and keep their lights on in their home. this is not about non-essential services. these are life and death services for these families. >> reporter: bridgeport's congressman provides a glimmer of hope. >> i don't think this can last for weeks. every day there are stories like melissa's. they build up and apply pressure. i don't think we are talking about a long period of time. >> reporter: those are words melissa needs the hear? what are you going to do tomorrow? >> what can i do?
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people will watch your child. they will charge $10 oh a10 an . i'm basically giving my whole paycheck to watch my child. i can't afford it. i can't afford to sit home either but that's swhraeu to do now for my child. >> reporter: this is the way it's going to be for melissa and ramon until washington provides them with some form of relief. al jazeera, bridgeport, connecticut. >> the shut down the effecting 23 head start programs across the country. those are responsibility for 19,000 children. tommy is head start senior manager and joins us from articleing to*rpb, virginia. those people that question just saw describe head start as something that's sendtial to their lives and it's not deemed essential. obviously the fact that that funding has stopped. it means tphoefrt of body share there is view.
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that's not as important as it looked to us. >> that's exactly right. the bottom line is far lot of families across the country, head start is all they have left right now. unfortunately, we're hearing today and, yesterday i should say, up to 19,000 may be lose access the to head start service. this is on top of 57,000 children that already lost services and lost their spot in head start. it's andy additional cost on top of a very deep root that's been devastating for families. i don't understand how this isn't essential. >> there's a program in massachusetts that just reopened. a head start program that just reopened on monday because of the sequester. >> reporter: that's exactly right. one of the challenges that the program's face and why the sequester has been so whraoeud seen in head start is because it
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came half way through the year. so the programs that are opening up on october 1st are the programs that are being impacted be i the federal shut down. they are also the programs that are having to the federal government funding cycle having absorbed more of that cut in a short oher time period. they have to take 5% of their overhall funding in a short time period. i was with the director this morning and hearing everything from them is just devastating. they literally open the doors on monday and found out monday afternoon that they may not be able to open the doors. thankfully, they were able to work something out with the state it is a short-term option but -- >> tell me this, if i'm one of these people in congress who say enough is enough. we can't fund everything for everybody. some things just have to not be funded. what's your best argument for
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programs like head start which, again, some people are determined to be non-sendtial and yet the 19,000 children and their families think it is essential. this is the best question that congress should be asking. when you look at it, head start is by far one of the most effective and also economicallyy smart programs that are out there. jim heckman is from the universefy of chicago. he has constantly done all the research. not early childhood but somebody who looks at the research and looks at dollars invested. the federal government should see a return on investment an we are hoping to again help citizens of our country see a better life. >> dr. heck pha*rpman has seen l times be at least anywhere from -- for every dollar
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invested about $7 returned. that's stadiums and thins like that. it's just smart. >> a senior manager of government affairs at head start. thanks for joining us. >> that's one of the things that the shut down effects. the shut down means investors, economists an guys leek me won't be able to analyze the job cans report this friday. that's the most important economic report that's supposed to come out on friday but these unlikely to happen if the government is still closed for business. that meant that there's more attention paid another report that's released on wednesday. according to payroll company, 166 thourbs private sector jobs were created last month nap is fewer than economists expected. the job market has softened in resent months because of the cut back in government spending. a cut back for gin supremacy and later another "f" that's at the
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center of a legal victory. workers struggling to keep their saving plants from. those stories and more as "real money" continues. .
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fries ros >> prices rose slightly. they great news for america's growing energy export market. according to a new study done by the "wall street journal" the u.s. is set to over take russia as the number one oil and gas from duceser iproducer in the w. hydraulic fracking. they now use 60% of the oil it uses and that's the opposite of how it was a u few years back. at the same time, u.s. oil imports have fallen by 15% in the past five years and tphafp travel gas imports are down bay third. also, according to the data crunch by the journal. while saudi arabia still produce more crude oil, both u.s. and russia produce more natural gas. what is new is that the u.s. tax
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more gas than russia did last year for the first time in 30 years. russia has been hard pressed to keep up its output and slow to embrace fracking which, as you know, is contr controversy shal. it now means more competition for russia and opec. some suggest the growing u.s. exfort market will give them a run for their money. other says say the u.s. the energy boom is a big pwub that is due pop in a few year's time. it has ban busy day for president obama. mike joins us live from the white house with the very latest. the meeting is over, mike. but, there are a lot of people who are look at this saying it's still between the president and congress it's still between republicans an democrats. you pointed out before this all started a couple days ago that this is more a fight between republicans. tell me where that fight is the going right now. >> there's so many interesting ways to look at this.
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people role their eyes and we shake our heads here in washington. the political enter spray fascinating in terms of the consequences that we're suffering and we they suffer come october 17th. this is a question that john boehner the leader of house republican says it's question of math and tradition. let me explain the math real quick since this is a business show. there's 233 republicans in the house of representatives. a majority of the house, 218 votes. that's a ma majority of the peo. that means john boehner has 15 votes to stay in. this is not something that republicans or democrats invested. you can go back to oh the 19th century, people who are in the majority do not pass things over the objection of the core interest of their party and they only pass things if they can do so by themselves without any help from the other side.
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there have been anonelies between the history of the republicans. this is the way it works right now. what the you have when you're john boehner and look at this. he did not want to go through this and anything else that we gave in, the tea party, the base of his party. so any 15 of those guys can get together. you cannot defy the base. the base is motivated. the base vote and that -- the base -- but there are republicans -- -- >> but, mike, there are people on the other side. i don't think it's fair to call them moderates. they are not part of that state and they are getting together and saying, come on, we got break this. >> here's the thing. you're talking about moderates in the house of representative sendives. it's an oxcy moron it doesn't happen. there's no question. if you do oh the no count among house republicans, that the majority of them would vote far so-called clean spending bill.
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far be it, heaven forbid that john boehner for reasons i just explained put something to pass with democrats. there's no question. this is the presidential talking point but because it's the talk point doesn't mean it's not tr true. he's not effecting with the care act the in any way, shape or form. >> mike, with us at the white house. it's "f" word that can destroy your retirement savings. fees. one company agreeed to fay workers over 401k fees. it's story for big implications for all 70 million american workers a 401k. you'll want to hear next on "real money."
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millions who need assistance now. we appreciate you spending time with us tonight. up next is the golden age of hollywood going golden but elsewhere. why l.a.'s mayor has declared a state of emergency for the entertainment industry there. next.
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70 million workers have retirement accounts. that's a lot of people and a lot of money. it's big news when a fortune 500 oh company like international paper settles a lawsuit with workers who oh claim the company didn't do right by them and their 401k plan. onof the big issues here is one we've reported on before. fees. the paper agreed to pay $30 million-dollars. the company didn't do enough to protect workers.
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>> the settlement comes at a time with increased scrutiny with 401k fees. workers still understand the damage that these can do on the retirement savings. the 401k at 7% compounding interest at 35 years, your net egg will grow to $227,000. if all else stays the same but fees and expenses are 1.5%, after 35 years, you will have lost $64 ,000 assets because of those fees. the nest egg will be 28% smaller. you will only have $163,000. so, more and more people are
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aware that they don't know what's going on in their 401k plan and there's more concern about having adequate retirement going in to the future. >> reporter: the question is whether new labor department rules and 401 401k settlements e this latest one will help protect the workers. >> legal analyst say international paper $30 million-dollar is the second largest se settlement given. now acocording to to a 2010 stu0 study, it can cost a family nearly $155,000 over a lifetime. the policy analyst authors the report and joins us now. thank you for being with us. >> thank you for having me on. >> i like to tell people what they can do about something it take money outover account.
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i can't tell my viewers what they can do. stay in really can't do all that much. >> there's something they can do. but, agree there t it's frustrating how little they can do. there are some thing use do right way. you can actually say about 1% for equity funds and high fees. then you can do a couple things. you can look at an ira. it will allow people with a very throw fee iras. if if u you feel com comfortabl, talk your employer and. if you're done switching plans if that's appropriate. you can look at your own investments and see if you can invest in funds and things like that. if you have 10 or 20 different choices that your company offers. there are often lower cost plans. is that is avy from an investment perspective. the more expensive funds pwhaeu the ones that are actually
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better. >> well, it shows that nine times out of 10, they under perform and they are actively traded and under performed the invest funds over a long period of time. that's the reality of the market. if you can beat the market over a long period of time, then it would be the market then the market would be higher. >> however, all of what you're speaking to presumes that people know how to log in to their accounts. maybe the first thing you do is log in, look at it, know your fees and be able to tell someone i'm paying a higher fiore lower fee for this. than may be the best starting point. >> exactly. that's the first step. talk to your financialed a vie saorpbd your hr person. that's your first step. do i have high fees? >> make sure, no matter what
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your fees are, you make sure you always have the employer match. if you contribute no an ira and don't have the employer match. >> your study shows it may cost a new family $155,000 but the word ohing is stricky there if you didn't invest, it would -pbts cost you that. this is still if best of not a great system. you shouldn't choose not to be invested because there are fees. > well, it puts some pressure through the entry and things seem to be getting a little bit better. thanks for joining us. >> thanks for having me on. >> don't forget our question for the day. >> if you want see more of night's stories log on. our story goes to an anonymous whistle blower doesn't need my
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thoughts because he's $14 million-dollars richer. they told us that they awarded a money to a person's whose information led to substantial investor funds. in a world where so many of you are afraid to invest your money, this gives me a little hope. there are risks in investing. normal market rais market risksr and terror attacks. we can't control those. we can make it harder to